Isls Loan Forgiveness

Isls Loan Forgiveness

The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the current stimulus legislation. 

The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout of the coronavirus epidemic. The legislation required that the SBA provide simplified forms within 24 hours of the signing into law. This was done to facilitate the application for forgiveness. The legislation also contained conditions that would encourage banks in the community to lend more specifically to minority-owned companies who had a difficult time getting loans last year.

Isls Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within 24 days from the date of enactment under the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released additional updated forms.”

Terms for forgiveness for the initial draw of PPP loans

Isls Loan Forgiveness – First Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8-to 24-week period after loan disbursement:

  • The levels of compensation and employee pay are maintained
  • The loan proceeds are spent on payroll and other expenses that are eligible and
  • Minimum 60% of proceeds go to the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to eligible borrowers are qualified for loan forgiveness if the loan is paid within an 8– to 24 week time frame.

  • Employee and compensation levels are maintained in the same manner as is required for the First Draw PPP loan
  • The loan proceeds are used on payroll costs and other eligible expenses; and
  • A minimum of 60% of proceeds are used to pay for payroll expenses
  • How to apply for loan forgiveness and the time to apply

Once all of the loan funds have been utilized the borrower is eligible to be granted forgiveness. The borrower can apply for forgiveness at any time up to the loan’s maturity date. Borrowers who do not request forgiveness within 10 months of the end date of the loan are eligible to receive the loan payment from their PPP lender.

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